Energy, food costs push inflation rate to 17-year high

Prices for food, gasoline and pretty much everything else spiked again in July, causing some Houston-area consumers to turn to coupons, buying in bulk and bargain hunting.

Consumer prices increased a seasonally adjusted 0.8 percent nationwide last month, according to the Bureau of Labor Statistics, driven by steep hikes in food and energy, including gasoline, electricity and natural gas.

That increase comes on the heels of the 1.1 percent price spike in June, the biggest monthly jump since 1982.

Over the year, U.S. consumer prices are up 5.6 percent, the highest annual rate of inflation since 1991, according to the government's report released today.

Area residents say the price jumps have forced them to find ways to cope.

Sandra Castillo, a second-grade teacher, recently started using coupons to cut her food bills. She figures she is shaving off $11 to $12 every time she goes to the grocery store, about 10 percent of her typical $120 bill.

"It's definitely helping out," said Castillo, who was attending a conference Thursday at a downtown Houston hotel.

Bridgette Knox, an accountant who works for a property management company, said she has started shopping more at giant discount warehouses and is buying more in bulk.

It's not just paper products but meat, fish, yogurt and soy milk, said Knox, as she waited in front of a restaurant for her lunch partner.

In Houston, grocery prices increased 1.8 percent in July over the previous month, led by a rise in lettuce, eggs, steak, ground beef, bread and milk, said BLS regional economist Cheryl Abbot. They were offset by lower prices for tomatoes and various cuts of pork.

Local prices are not seasonally adjusted.

Over the year, local food prices are up 8.4 percent.

The high price of gasoline has another accountant, Kevin Kong, looking for cheaper places to buy gas for his SUV.

"It made me watch where I pump gas now," said Kong, who tries to avoid the more expensive filling stations downtown. "I used to go anywhere."

In Houston, the price of gasoline increased 1.3 percent in July..Over the year, local gas prices were up 37.7 percent.

That spike in gasoline and diesel has 47 percent of Texas recreational vehicle owners traveling shorter distances and camping less often, according to the Texas Association of Campground Owners. The group tallied the recent responses of 576 Texas RVers in the informal online survey.

"People still want to camp," according to Brian Schaeffer, the association's executive director and chief executive. "They just want to do it closer to home to save costs."

The data, which the association believes is the first statistical evidence of the impact of high fuel prices on the Texas campground business, is affecting public and private parks about equally.

Stewart Perlow has a 31-foot travel trailer. As gas prices were starting to skyrocket about four months ago, Perlow decided to move his trailer from Canyon Lake to Sargent, an 84-mile drive from his home in Katy.

Perlow, who loves to fish, was also getting tired of the four-hour drive to Canyon Lake.

"I'm saving about $80 a weekend," he said. "That's a couple of cold ones and some shrimp."

Businesses are also struggling with the high costs.

At Houston-based Sun & Ski Sports, shipping is getting more expensive, said Carl Foy, promotions and special events manager.

While the retailer is paying more to stock its merchandise, the high cost of fuel has a positive side: It's encouraging more customers to buy online, Foy said.

It's also boosting bicycle sales, he said, adding that more of his co-workers are riding their bikes to work including some that live as far as 10 miles away.

Getronics, an information and telecommunication company, is battling high fuel prices another way. It's shifting more of its employees to telecommuting. And it's saving money at the same time.

Bruce Coy, project coordinator for teleworking, said one-third of the company's 600 employees in Houston are working from home. They typically come in to the office one day every week or two.

In the past year, Getronics has saved nearly $1 million in real estate and related expenses because it needs less office space, said Coy, who accepted an award Thursday from the Houston-Galveston Area Council Commute Solutions program that named Getronics the best telework program.